Cash calf and feeder cattle prices gained momentum last week as buyers took advantage of some of the last auctions of the year.
Steers and heifers sold $2-$4/cwt. higher with instances of $5-$6 higher, according to the Agricultural Marketing Service (AMS).
“Demand was good for many calves, with very good demand for all yearlings offered,” say AMS analysts. “This was the last marketing opportunity for 2019 as a majority of auction barns will be closed until after the New Year’s holiday.”
Except for 45¢ and 5¢ higher in the back two contracts, Feeder Cattle futures closed an average of $1.16 lower week to week on Friday (40¢ lower toward the back to $1.87 lower near the front).
“Feeder cattle prices have been holding fairly steady and the futures market has some optimism priced in, but much of that optimism does not come about until the summer of 2020,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The winter and spring prices on feeder cattle are likely profitable for stocker producers who got the cattle bought fairly inexpensively and were able to keep them alive, but it is doubtful that anyone will have windfall profits from the turn.”
AMS analysts note moisture is still lacking in winter wheat areas.
Feedlot Placements Up
Although higher feedlot placements were anticipated, Friday’s monthly Cattle on Feed report could apply some pressure.
November placements in feedlots with 1,000 head or more capacity were 2.09 million head, which was 4.86% more than the prior year. Heading into the report, consensus view of analysts was for an increase of 1%.
Marketings in November were on par with expectations at 1.81 million head, which was 3.00% less than the prior year.
Likewise, the on-feed inventory Dec. 1 was close to expectations at 12.03 million head, which was 2.49% more than a year earlier.
Fed Cattle Prices Move Higher
Negotiated cash fed cattle prices were generally $1 higher on a live basis last week: $120/cwt. in the Southern Plains; $120-$121 in Nebraska and the western Corn Belt. Dressed sales were $2-$4 higher at $192.
“This week’s live cattle price is the highest for finished cattle since early May, and it will provide a little momentum heading into winter and early spring,” Griffith says. “With the price of finished cattle starting to gain some steam, feedlot operators will be able to focus more of their attention on cattle health and pen conditions.”
Live Cattle futures closed an average of 66¢ lower (12¢ to $1.75 lower).
Harvest flows continue to return to normalcy after resumed operations at the Tyson plant in Kansas. According to AMS, estimated cattle slaughter for the week was 668,000 head, which was 6,000 more than the previous week and 8,000 head more than a year earlier.
After a false start a week earlier, wholesale beef values may have carved out a seasonal bottom. Choice boxed beef cutout value was $6.59 lower week to week on Friday at $209.70/cwt. Select was $3.21 lower at $201.03.
“The market is now shifting from strong demand for middle meats for the holidays to end cuts that will be slow cooked during the winter months. The part of the market that remains unknown, as it is every year, is the winter weather,” Griffith explains. “Severe weather that influences travel in densely populated areas generally slows beef consumption and movement. The hope for the beef market is that winter storms do not wreak havoc on cattle or consumers.”
Friday to Friday Change*
Weekly Auction Receipts
| Dec.20 | Auction | Direct |
Video/net |
Total |
|
223,000 (-124,200) |
45,500 (+11,100) |
14,000 (+12,100) |
282,500 (-101,000) |
CME Feeder Index
| CME Feeder Index* | Dec. 19 | Change |
| $146.29 | + $2.89 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Dec. 20 | Change |
| 600-700 lbs. | $155.65 | + $4.08 |
| 700-800 lbs. | $148.78 | + $1.25 |
| 800-900 lbs. | $145.72 | + $2.42 |
South Central
| Steers-Cash | Dec. 20 | Change |
| 500-600 lbs. | $156.87 | + $6.28 |
| 600-700 lbs. | $145.81 | + $1.25 |
| 700-800 lbs. | $146.15 | + $2.43 |
Southeast
| Steers-Cash | Dec. 20 | Change |
| 400-500 lbs. | $150.05 | + $3.48 |
| 500-600 lbs. | $140.49 | + $6.72 |
| 600-700 lbs. | $133.19 | + $0.71 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Dec. 20 ($/cwt) | Change |
| Choice | $209.70 | – $6.59 |
| Select | $201.03 | – $3.21 |
| Ch-Se Spread | $8.67 | – $3.38 |
Futures
| Feeder Cattle | Dec. 20 | Change |
| Jan ’20 | $144.275 | – $1.400 |
| Mar | $144.375 | – $1.875 |
| Apr | $146.500 | – $1.550 |
| May | $147.475 | – $1.125 |
| Aug | $152.275 | – $0.625 |
| Sep | $152.600 | – $0.400 |
| Oct | $153.300 | + $0.450 |
| Nov | $152.500 | + $0.050 |
| Live Cattle | Dec. 20 | Change |
| Dec | $122.225 | – $0.150 |
| Feb ’20 | $125.800 | – $1.750 |
| Apr | $126.725 | – $1.475 |
| Jun | $118.125 | – $1.300 |
| Aug | $115.825 | – $0.575 |
| Oct | $117.500 | – $0.175 |
| Dec | $119.775 | – $0.125 |
| Feb ’21 | $121.525 | – $0.250 |
| Apr | $122.100 | – $0.175 |
| Corn | Dec. 20 | Change |
| Mar ’20 | $3.876 | + $0.066 |
| May | $3.940 | + $0.060 |
| Jul | $3.994 | + $0.058 |
| Sep | $3.994 | + $0.064 |
| Dec | $4.016 | + $0.064 |
| Mar ’21 | $4.110 | + $0.060 |
| Oil CME-WTI | Dec. 20 | Change |
| Feb | $60.44 | + $0.46 |
| Mar | $60.25 | + $0.58 |
| Apr | $59.95 | + $0.69 |
| May | $59.55 | + $0.75 |
| Jun | $59.07 | + $0.74 |
| Jly | $58.54 | + $0.71 |
Equities
| Equity Indexes | Dec. 20 | Change |
| Dow Industrial Average | 28455.09 | + 319.71 |
| NASDAQ | 8924.96 | + 190.08 |
| S&P 500 | 3221.22 | + 52.42 |
| Dollar (DXY) | 97.68 | + 0.50 |